Perry vows to leave Rainy Day Fund alone

AUSTIN - Despite pleas from educators, advocacy groups, the Democratic minority in the Legislature and others, Gov. Rick Perry, Lt. Gov. David Dewhurst and other legislative leaders have vowed not to tap into the state's savings account, better known as the Rainy Day Fund.

But a growing number of Republican lawmakers, including Sens. Robert Duncan of Lubbock and Kel Seliger of Amarillo, said a budget shortfall that could range from $15 billion to $27 billion may force legislators to spend at least part of the $8.2 billion fund. If untapped, the fund is projected to grow to $9.4 billion in the next fiscal biennium, which begins Sept. 1.

"We ought to use it, at least some of it," said Duncan who, like Seliger, sits on the influential Senate Finance Committee.

Seliger, citing a draft House budget bill that proposed closing Frank Phillips College in Borger and three other community colleges, said the Rainy Day Fund was created to deal with emergencies such as the one the state now faces.

"You use some of the fund's money to avoid situations like these, which would be devastating not only for those colleges and the communities they serve, but for the entire state." Seliger said.

Approved by Texas voters in 1988, the Rainy Day Fund gets most of its money from oil and gas taxes.

Rep. Drew Darby, R-San Angelo, a member of the budget-writing House Appropriations Committee, said he favors using at least part of the fund.

"I would be very supportive of it," Darby said. "It is officially called the Economic Stabilization Fund for a reason. It was created to stabilize the economy, and if it helps to balance the budget, then it should be used."

Like other House Republicans, Darby said he thinks neither the House nor the Senate currently have the two-thirds vote needed to tap into the fund.

But there's growing concern among his colleagues about what the proposed budget cuts could do to many legislative districts. Darby said more lawmakers could end up supporting spending at least some of the fund by the time the Legislature votes on the budget in April or May.

Rep. Charles Perry, R-Lubbock, who waged a small-government and cut-the-budget campaign, said he is for using the fund to make up for the estimated $4 billion gap expected for the current biennium, which ends on Aug. 31.

Sen. Steve Ogden, R-Bryan, chairman of the Senate Finance Committee, told the San Antonio Express-News he also thinks part of the fund ought to be used to cover the shortfall.

Like Darby, Perry said he thinks neither the House nor the Senate now has the two-thirds vote needed to tap into the fund, but they will in April or May when the lawmakers vote on the budget bill.

"The votes are going to be there," Perry said. "We understand that we are not going to have any new taxes, so where else do we get the needed money?"

However, veteran lawmakers such as Republican Reps. Warren Chisum of Pampa and John Smithee of Amarillo, are not convinced.

"I'm not sure we need it yet," said Chisum, who chaired the Appropriations Committee in 2007 and was a panel member in 2003 when the Legislature tackled a $10 billion gap. "I still think we can balance the budget without using it, we just need to be smart about it."

Smithee, the dean of the Panhandle/South Plains legislative delegation, said he'll probably wait until State Comptroller Susan Combs' second revenue estimate in May before he decides on how to vote. Combs gave legislators her first revenue estimate on Jan. 10, the day before the 82nd Legislature convened.

"If the comptroller gives us a good economic forecast, we may not have to use the Rainy Day Fund," Smithee said.

Dick Lavine, senior fiscal analyst at the Center for Public Policy Priorities, said that despite the governor's vow not to tap into the fund, he is likely to agree to at least use some of the money to make up for the shortfall.

Lavine said he'll be interested in whether Perry signals a willingness to use the fund in his state of the state address to the Legislature today.

"They just can't have all that money sitting there and expect to balance the budget with cuts alone," said Lavine, whose think tank advocates spending the entire fund to avoid massive layoffs and furloughs at all levels of government, especially in public schools.